Underground operations at Appin remain suspended after the NSW Resources Regulator responded to the threat of the higher gas levels at the mine earlier this year.

“A review of the operation’s systems and operating practices is currently being undertaken to ensure its ongoing safety and reliability,” Illawarra metallurgical Coal’s parent company South32 said in a statement to the Australian Securities Exchange.  

“Given the scope of this review, an extended outage is now anticipated before production at Illawarra Metallurgical Coal can be restored to historic levels.”

In May, South32 said Illawarra Metallurgical Coal’s production in 2016-17 is expected to be at least 10% below prior guidance of 7.9 million tonnes because of production stoppages at Appin.

“A revised production forecast for FY17 will be provided in due course, with the decrease expected to translate directly to sales given low inventory levels,” the company said. 

“A commensurate increase in unit costs is also anticipated.”

Illawarra Metallurgical Coal’s total saleable production fell 9% to 5.3Mt in the nine months ended March 2017 as challenging ground conditions were encountered at Appin Area 9.

Mining rates were also moderated at Appin Area 7 to ensure gas concentrations were maintained at safe levels.

Production in the March quarter was impacted by a longwall move at Dendrobium that was extended by four days and was slow to ramp-up due to challenging roof conditions.